Fremont hospital CEO gets six-figure bonus after delay

FREMONT -- Amid a budget crunch that has forced sweeping cutbacks at its medical facilities, the Washington Township Health Care District board of directors on Wednesday awarded its CEO $162,783 in incentive pay that raises her total annual compensation and contract perks this year to more than $800,000.

The bonus pushes Farber's total 2012-13 compensation past $813,915, less than the $936,349 she made in 2011 or her $912,519 pay in 2010, when she was among the top five paid government employees statewide in a survey by the state controller's office. There has been no comparable survey this year. By comparison, Gov. Jerry Brown will make just over $165,000 this year.

Board member Bernard Stewart, a local dentist who has served for more than a decade on Washington's board, said the salary comparison with other public employees was unfair.

"It's a temptation for all of us to compare the CEOs salary with other elected officials or other public officials, but I can't stress in the strongest means possible, that is an absolute error," Stewart said. "We in this hospital are a public hospital. We are a publicly elected board, but we are engaged in an incredibly competitive and difficult business and we are different from any other public organization in that regard."

The southern Alameda County public district operates Washington Hospital in Fremont and other medical centers in the Tri-City area and receives tax money from 320,000 district residents under voter-approved bond measures.

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The board had postponed a decision on Farber's incentive pay in mid-December when voting on her contract extension, while freezing her base salary through 2016. At the time, Farber was overseeing a 13 percent workforce reduction that eliminated 200 mostly vacant jobs. The district had seen operating profits plummet tens of millions of dollars last year from recent years.

In the end, it chose to give her a bonus of 25 percent of her salary, less than the 40 percent she was eligible for.

Ahead of the vote for the bonus Wednesday, all five board members praised Farber's leadership and said that, because of the difficulties facing the hospital, experienced leadership was needed. Farber has served as chief of the district for the last 18 years.

Dr. William Nicholson, board president, said the passage of the $186 million Measure Z bond measure in November was "a clear referendum on our health care district. If the CEO and our staff didn't have the support of our community, the bond measure would not have passed, yet it passed with over 73 percent."

Board members credited Farber with implementing a new electronic records system, the construction of the district's new center for joint replacement on time and on budget, and for various accolades the district received last year. Among them, the district was ranked the fourth best hospital in the Bay Area by U.S. News & World Report and among the top 10 in the state for joint replacements by HealthGrades, a designation received for the last seven years.

Board members said Farber's decision to reduce the workforce was evidence of her exemplary leadership.

"Making the decision to downsize, or right-size, when necessary, is as much a part of being a responsible administrator as is building, growing and improving the health care system," Nicholson said.

Board member Michael Wallace said Farber, "has made tough and unpopular choices. The easy thing would have been to kick the can down the road, which is what we see happening all the time in Washington, but she didn't do that," adding, "I don't want our leadership and management team wooed away by those monolithic systems willing to pay market compensation, which is a risk if we are not willing to do so."

Farber briefly thanked board members after the unanimous vote. Farber did not respond to a request for comment Thursday.

There were no public speakers for the item.

In granting the bonus, the board opted to skip a consultant analysis of comparable CEO pay nationwide it usually relies upon when making compensation decisions. Several board members, however, cited the results from last year as evidence of the need for this year's incentive pay.

Ashly McGlone covers San Leandro, San Lorenzo and the Washington Township Health Care District. Contact her at 510-293-2463. Follow her at Twitter.com/AshlyReports.

Operating Income Back in Black
The Washington Township Health Care District's operating income, in the red a couple months ago, is back in the black, according to the December financials reported at Wednesday's board of directors meeting. Nearly halfway through the fiscal year, the district now reports a year-to-date net operating income of $341,000, up from the $1.64 million in operating losses reported in October.